The latest RICS (The Royal Institute for Chartered Surveyors) figures, showing the highest number of house sales in England and Wales for three years during the first quarter of 2013, have put estate agents in a more buoyant mood. Although quoted property sales, at an average of 17, is not exactly breath-taking, it will raise hopes that the worst of the slump is over. Previous quarterly figures had slumped to lows of less than 10.

RICS global residential director, Peter Bolton King, said: “A buoyant, healthy property market is central to economic recovery. While these are still very much early signs, it is encouraging that sales are beginning to pick up.” Adding to the general air of optimism for the market is an anticipation of house price rises. Indeed, one in five estate agents said that house prices are rising in their region, the highest proportion since 2010. However, as usual, the movement of prices varies greatly from one region to another, with London leading the way.

RICS Data Shows a Big Difference in How Regional House Prices are Performing

The Centre for Economics and Business Research has predicted that the cost of the average home will rocket by £50,000 pounds over the next five years. It says that house prices will surpass their pre-crisis (2007) peak next year, and by 2018, it predicts that the average UK home will be worth £267,000.

The market is being helped by the Government’s ‘Help to Buy’ scheme and the Bank of England’s Funding for Lending initiative. Under the Help to Buy scheme announced in the last budget, 15% of the mortgage loan is guaranteed for those who have managed to save a 5% deposit. Funding for Lending allows lenders to get their hands on discount finance on the understanding that they lend it to homebuyers and businesses. Schemes like these are making mortgages more accessible and therefore boosting a previously stagnant housing market.

Sources at the Bank of England show that some home loans have never been cheaper. When Funding for Lending began, back in August 2012, the average rate for a two-year fixed deal was 5.93%. Now it stands at just 4.57%.
Sources: thisismoney.co.uk, rics.org